Is their recovery our recovery? Are we better off? We offer a definite maybe, and some things we learned.

When times are good, it’s hard to see the bad. But when times are bad they’re crystal clear. The bad is always there. Be more vigilant and less complacent when you are doing well.

Be alert to early warning signs. Failure to recognize them in this environment can be catastrophic.

A strong (and potentially stronger) Canadian dollar may push US customers elsewhere. Diversify into other markets.

Taking on the challenge of fundamental change is admirable. However, changing too quickly can lead to disaster. Pace and direction are critical.

Loyalty is not a privilege or a birthright, it has to be EARNED. Even by family.

Key people need to feel appreciated and respected. One company we know lost eight talented people in a month. They are now fighting to survive!

We do not have all the answers. Admitting this to a client means we can start identifying the people who do.

For us, honesty means telling a client what they need to hear, not what they hope to hear.

2008

A miserable year finally ends.

We are completing a decade of sending these year-end messages. The worldwide financial crisis has overshadowed every decision made in the last 12 months. So all our “Learnings” are focused on that. There’s plenty of pain to go around. And pain is a great teacher.

Not everything is your fault. Sometimes circumstances are totally beyond your control. The important thing, as they say, is to know what you can and cannot affect.

If you're not already in trouble, you could be. Soon. The rumbling is still going on and if you're not having financial troubles, your customers could be. Or their customers could be. Better find out, the sooner the better.

You need financial markers. Not just profit and loss, those are for year end. Every industry has measures: billings per person, margin per item, etc. Need some?

Better love your customers. Because if you don't someone else will. Find out what they want and make sure they're getting it from you.

If you're not suffering, pretend you are. Make the staff cuts, reduce the costs, beat the bushes for new clients, invent new products and services with high value. You'll come out of this flying.

Obama is your president, too. As Canadians we like to think that we have our own economy. We do, and we don’t. As our largest trading partner, Obama’s themes will be played out in our economy. Are you positioned to ride the new waves?

Supportis closer than you may think. It starts at home: renew ties with your family and friends. Not all measures and pleasures of success are financially based.

2007

That queasy feeling in the pit of your stomach. Big ups and huge downs, all that knocking around in between. Is your seat belt securely fastened?

When you sleep with dogs don’t be surprised if you get fleas. How well do you know your client: their business, their character, their people? Are you comfortable?

Best friends don't always make the best business partners. This goes twice for spouses.

Sting sang “when you love somebody, set them free.” It’s also true for that obsolete inventory. Kiss it good bye, don’t pay for storage. Get over it.

You can only protect yourself so well. Sometimes market forces are so overwhelming you can’t do anything. Witness the surge in the Canadian dollar.

Spending money to make money is not always a truism. If your revenue is $5 million and you spend like it's $50 million the bottom quickly falls out of your bottom line.

You still can't be all things to all people. Stick to your core business and proceed carefully.

Out-sourcing to add value is well developed and provides protection against suffocating overheads.

Bankruptcy may seem like a last resort, a humiliation and a defeat. But you won’t be the first or the last. And at the end of the tunnel there really is a ray of light: you start fresh, relieved of debt.

Surround yourself with the right professionals for the job as you go forward. It’s good protection against having to go backward.

On a personal note, no matter how much you throw away before you move offices, you will still throw away about a quarter of the stuff as you unpack.

And here’s a jump on 2008 learnings, the lessons we would not like to absorb in the coming year.
Always look to trim fat in the business. Make it a regular goal and be ruthless.It’s good for your karma to carry a weak partner or client. But it’s tough on revenues. Which do you need more?

2006

We try to extract some sweetness from our sour situations. This year we also squeezed out these essential lessons.

Things are not always as bad as they seem. Often they are worse. We found it pays to dig below the surface, and keep digging no matter how ugly.

There is no hole so big it can’t be climbed out of. You might not look graceful doing it, you might lose a little face. The first step is to acknowledge there’s a huge freakin’ hole.

When grabbing at straws, you might get the short one. Always evaluate your options thoroughly. One more thing: expert advice might be cheaper in the long run.

That White Knight could be wearing a black hat. It’s not always easy to sort out the good guys from the bad guys. Suspect everyone and protect yourself at all times.

“Let it be” can be good advice. “Let it go” can be better advice. Cutting losses can be painful, but not as painful as turning a blind eye.

Time is not always on your side. You can’t fight a high tide. When it’s clear you need to take action, be decisive. And swim, don’t sink.

When the times they are a changin', you’d better change too.

When planning for succession, focus on finding the best person regardless of family name. If the kids are smart, they’ll thrive. If they aren’t, do you want them running the business?

Even the government makes mistakes. Politics sometimes forces unpleasant decisions. All you can do is be glad you put a long term plan into place and have diversified. Didn’t you?

2005

Separating truth from fiction.

Times change. Many businesses are still working the old way, the way they did a few years ago while everything around them is changing. A fresh year calls for a fresh plan.

Even hard noses can get bloodied. We saw a creditor take an inflexible position only to discover at the end he wound up paying instead of receiving.

A friend of ours saw his business drying up in Toronto and took the drastic step of cashing in, moving out and exploring career alternatives. In the new town, after a short waffling period, fate put him back in the very same line of work and he's never been happier. Lesson learned again that very often in business luck is preparation meeting opportunity.

There are many good people in Canadian business. There are also many really bad ones. We learned the latter can have a far greater effect on your business than the former.

Businesses in trouble avoid facing facts. We've learned to speak our minds even if it's not what the client wants to hear. At least at the outset.

Families are wonderful but we've learned to question the wisdom of their operating a business together. When I play gin with the kids I still cut the cards.

Even friends in business together present certain problems. We've learned that when it's business the only way to behave is strictly business.

We've learned that businesses rise and fall. At the end of every year we can see we've learned a lot, but as we look around we know we're going to learn lots more.

2004

Maintaining perspective in changing times.

A receivable is only worth the cash you collect. What looks like a pot of gold at the end of the rainbow may vanish by the time you get your hands on it.

Some industries may simply have run their course and never enjoy growth again. There are pressures from external economies with cheaper inputs. we can suffer, adapt and thrive or just suffer.

Sometimes a loss is an asset. Correctly handled, tax losses can become a source of recovery for creditors. Not that you want a steady stream of them.

It may be wiser to settle rather than litigate. You often end up with as much or more, sooner and without paying extra costs.

Schumpeter was right. The destructive and renewing process of free enterprise is an engine of our economy. Financial disappointment does not have to mean shame, but could be a stage of growth.

Only so much can be done after the fact. Banks and suppliers must be ever-vigilant in managing credit risk. no matter how longstanding the relationship, know your client.

As the NHL lockout shows, you can put off making tough financial decisions. But ignored problems often evolve and grow. And once they explode, clean up and recovery are exponentially more difficult.

A change in management works wonders. Look at Boston: seats atop the Green Monster, a decisive field manager and a curse removed after 86 years of struggle.

2003

As we close the books on another eventful year, we share with you certain conclusion we've reached. In retrospect, the theme this year was "Flexible financial planning helps a business stay nimble as market forces change".

Choosing the wrong partner can be expensive. Meaning, it could cost some or all of one's business. Due diligence is worth doing well.

The absence of proper planning almost invariably leads to failure. Good luck can mitigate or postpone the inevitable, but an accident waiting to happen nearly always does.

The government is not a bank, although people love to borrow from it. And when the debt comes due, it's usually with a vengeance.

You can have a great image and still go broke. We noted again this year that superb marketing and sales cannot sustain a company if fiscal controls are not in place.

It's not just who you know or what you know, but how you execute that really is the difference between having a dream and operating a business.

An insolvency at a remote location reminded us that "interested parties" can go beyond creditors, debtors and professionals. A whole town can thrive or suffer depending on how well one business has prepared and executed its plan.

At Schonfeld Inc. we tried adding expert advice with good results. Specialists helped us identify and recover extra value for the benefit of creditors.

2002

As we reflect on the year, Maintaining Control was an appropriate theme.
Here's what stands out:

Sometimes you settle, sometimes you file. Creditors would rather see something than nothing. Everybody prefers cash instead of regrets. Sometimes even the government.

People usually wait too long to get help. Even when the signs are there, people regard asking for help as weakness instead of strength.

A lot of people know their own business, but not business. We dealt with a lot of owner-operators and professionals this year. Even the smartest and most capable people don't necessarily know how to manage income and outgo.

No matter how bleak the situation, there can be a future. Stakeholder confidence in management is the first step in every successful restructuring.

Good information is halfway to a solution. Without a flow of reliable, accurate and timely information we sit in the eye of a raging storm with little clear idea of which is the best way out.

More hands create lighter work. Our business volume has grown in the last two years so we've added staff. Thank you for making this possible and necessary.

2001

Issues of one file rarely repeat in another. So we are always open to improving our skills and our results.
This year a theme that resonated was Uncovering Value.

The right kind of pressure, strategically applied, produces diamonds from coal. Sometimes prospective stakeholders need to be gently nudged; either to take action or to raise their offer.

People are valuable, particularly in a company under stress. On one file, a small group of motivated and knowledgeable staff made a huge net difference in the orderly winding up of a company's affairs.

The right advisors are worth their weight in gold. Hiring exactly the right law firm for one file produced fabulous results. Same was true on another file, when an ad guy gave tremendously level-headed advice.

There are new kinds of assets out there like URL's and websites. They may not appear on a balance sheet, but in an insolvency proceeding they can produce real money.

Another asset is awareness created by advertising. For one retailer, we used an advertising schedule similar to what had been used. It stimulated and motivated his customers, who rushed in.

In retail we could realize more value if we combined urgency with dignity. The retailer still went out of business, but the creditors went away a lot happier.

Even in a bad year, creditors don't have to lose as much money as everyone else. With the right strategy we uncover extra value and return it to creditors.

Part of value is the speed of money recovery. The more open and transparent our dealings, the quicker the deal.

There's also value in fees for service. We are able to step in and accept files when other firms are protective of their cost structure. Often size and agility are advantages.